Eurozone inflation accelerated to its fastest pace in nearly four years, according to preliminary data published Tuesday by the region's official statistics office, amid a surge in global oil and energy prices.
Harmonized consumer prices in the single currency area rose at an annual 1.8% clip in January, Eurostat said, up from a 1.1% rate in December and the fastest pace since February 2013. So-called core inflation, which strips out volatile prices for food, energy, alcohol and tobacco products, was estimated at an annual 0.9%, unchanged from the final December reading.
The modestly disappointing core reading held down gains for the euro which traded 0.1% higher against the U.S. dollar at 107.07 immediately following the Eurostat release.
Energy prices led the annual gains, Eurostat tables indicate, with prices surging and estimated 8.1%, nearly three times the pace recorded in December. Unprocessed food prices rose 3.3% from a year ago, compared to a 2.1% gain last month while service prices, one of the most important components from which to gauge underlying consumer price momentum, slowed to an annual 1.2% clip from the 1.3% recorded in December.
Traders had been anticipating a faster Eurozone inflation rate after data Monday that showed consumer prices in Germany, the region's biggest economy, rising at the fastest pace in three and a half years amid a surge in energy prices.
Consumer prices in Germany, Europe's biggest economy, rose at an annual 1.9% pace this month, Destatis said, up from 1.7% in December and the fastest rate since July 2013. The rate also falls largely in-line with the European Central Bank's definition of price stability of "just below 2%".
